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Takeover ‘patriots’ risk court action

National governments could be taken to court over protectionist action to defend their energy markets, according to the European Commission.

European Voice

3/7/06, 5:00 PM CET

Updated 4/12/14, 12:16 PM CET

The threats came after both France and Spain announced moves to thwart takeovers of national energy companies by foreign buyers.

In Spain, the government favours Gas Natural’s bid for electricity company Endesa over a €29 billion offer from Germany’s E.ON.

The French government has brokered a merger deal between energy giants Gaz de France (GdF) and Suez, after Italy’s Enel threatened a bid for Suez.

The Commission ann-ounced last Friday (24 February) it was referring Spain to the European Court of Justice over a national law allowing the government to block company bids for more than 3% of an energy company.

In the Endesa case itself, the Commission said its hands were tied until it was officially notified of Spanish government plans to block the E.ON takeover.

France could face legal action over a law to protect 11 “sensitive” industries, effective from the start of this year. A Commission spokesman announced on Wednesday (1 March) it had received details of the new French law – labelled “economic patriotism” in Paris and affecting sectors from research to arms manufacture – and was considering “the next step”.

Commission President José Manuel Barroso urged governments not to give in to rhetoric or nationalist sentiment.

“That is negative for Europe and negative for your countries,” he said yesterday (1 March).

But former Commission president and current Italian opposition leader Romano Prodi said Italian oil and gas company Eni and power company Enel could consider a merger in retaliation to the French moves.

Commission spokesman for competition Jonathan Todd said in response to rumours that Italy was planning to introduce laws that would protect its own companies that “member states are not allowed to take measures on the basis of reciprocity”.